Seat Belt Laws and Enforcement

1
Seat Belt Laws and Enforcement

• By Michael Palmer
• Econ 4353/Fall 2003
• Professor Rogers
• 12-8-03

2
How does it work?

• Two types of seat belt laws
• -Primary
• -More effective in enforcing seat belt usage.
• -Secondary
• -Can only be issued citation for nonuse of
  seat belt if driver is pulled over for another
  offense.
• (Census Bureau, 2003)

3
Who benefits?

• Passenger Cars
• -Reduce the risk of fatal injury to front
  seat passengers by 45
• -Reduce the risk of critical injury by 50
• -More than 12,000 lives saved in 2001
• Light Trucks
• -Reduce the risk of fatal injury by 60
• -Reduce the risk of critical injury by 65
• (Safety Belts and Teens, 2003)

4
Trends

• http//faculty.washington.edu/chudler/seatb.html

5
Economic Justification

• Seat belts save society an estimated 50 billion
  annually in medical care, lost productivity, and
  other injury related costs.
• An estimated 26 billion in economic costs from
  seat belt nonuse is burdened upon society
  annually.
• We, as society, pay higher taxes, health care,
  and insurance costs because of the nonuse of seat
  belts.
• (Loeb, 1995)

6
Consequences

• Externalities
• -Drivers who refuse to wear seat belts impose
  risks on society and themselves
• -These risks include personal injury, higher
  medical, health care, and insurance costs

7
Consequences(Externalities)

• (www.msu.edu/.../ open_access_and_negative_externa
  lity.gif)

8
Consequences

• Private Decision Rule
• -MPBgtMPC
• -How much would each individual be willing to
  pay before wearing seat belt?
• -How much benefit he values in terms of
  injuring themselves and others from seat belt
  nonuse?

9
Consequences

• Four criteria that apply to the seat belt laws
• Individualistic
• Desirable and ability to pay
• Altruism (Unselfishness)
• Based on revealed (observed) preferences

10
Consequences

• Moral Hazard Problem
• -Individual under-estimates the risk of
• not wearing seat belt
• -Injury to themselves and others
• -Costs pertaining to the nonuse of seat belts

11
Consequences

• Prisoners Dilemma (Tragedy of the Commons)
• -No concept of voluntary solutions
• -Seat belt laws are enforced by the government
  with the hope of increasing usage of seat belt,
  reducing car injuries, and reducing taxes on
  medical, insurance, and health care costs

12
Consequences

• Prisoners Dilemma (Tragedy of the Commons)
• (PlayersDrivers)
• (PayoffInsurance Costs)

http//www.mathpsyc.uni-bonn.de/doc/micko/4c.htm
13
Consequences

• Prisoners Dilemma (Tragedy of the Commons cont.)
• -Society (drivers) must voluntarily follow
  the enforced government law or pay fines via
  citations
• -Is the fine substantial enough to get the
  attention of society (drivers)?

14
Consequences

• Prisoners Dilemma (Tragedy of the Commons cont.)
• Other Programs to gain attention of society
• -Click-It-Or-Ticket Advertisement (Williams,
  2003)
• -Buckle Up for Safety Advertisement

15
Improvements or Changes

• Increase the citation charge if costs to society
  fail to decline.
• -Eventually an equilibrium citation price will be
  attained and taxes on medical, insurance, and
  health care will decline as a result

16
Improvements or Changes

• Reward society who do not receive seat belt
  citations with a decreased insurance costs after
  3-5 years
• -Seat belt nonuse may decline if a reward is
  given to society for its obedience of seat belt
  usage

17
Reference Page

• Loeb, Peter, D. (1995, May) The Effectiveness of
  Seat Belt Legislation in Reducing Injury Rates in
  Texas Journal of Economic Perspectives, (1-4)
• Safety Belts and Teens 2003 Report. (2003,
  Summer Issue) ADTSEA-The Chronicle. Census
  Bureau. (1-3)
• Stemmens, John. Do Seat Belt Laws Work? The
  Freeman. Census Bureau. (1-2)
• Holdorf, William J. (2003, August) Help Restore
  Liberty Repeal Seat Belt Laws. The Radical
  Academy Political Resource Center. (1-13)
• Seat Belts More Popular Than Ever. (2003,
  August) The Associated Press. (1-2)
• Williams, Walter E. Click-It-Or-Ticket.
  www.gmu.edu/departments/economics/wew/articles/03/
  ticket.html
• www.msu.edu/.../ open_access_and_negative_external
  ity.gif
• http//www.mathpsyc.uni-bonn.de/doc/micko/4c.htm
• http//faculty.washington.edu/chudler/seatb.html

18

19

• THE END